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L - Loews


nwoodman

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Myth, I agree with you.  I'm just trying to put the pieces of the puzzle together.  Thankfully, it's not a hard puzzle...and the Tisch's have to be really dumb to lose money with the company trading below book. 

 

Other than capital allocation skills, anyone have any other issues?

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My biggest annoyance is the lack of activity. If you cant find value from 2008 - 2012 then you just cant find value lol.

 

This is a fair point, but I'm less inclined to condemn them for it.  No, they're not Buffett or Hamblin Watsa, or any other top flight investment team.  But, they're on the record for being more interested in control situations than looking for minority stakes in public companies.  If you're interested in aggressive and opportunistic investment operations, L is probably not for you. 

 

At the end of the day, I do think they have the ability to grow IV per share decently over time, and I do think buying at a discount to IV will give you a good opportunity to achieve good long-term results.  To my mind, they're involved in durable businesses that will still be needed in 5 years or ten years.  If I had to hold L for 5 years with no chance to sell, would I?  Yeah, probably (which is not true for all my holdings, but good test).  They're not going anywhere and the value will grow over time and the share count will shrink over time and the weighing machine will probably realize the value soon enough for my purposes. 

 

 

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Loews is my 2nd largest position, behind BRK . I am not a full-time investor, am 23, and have much to learn, but I think that the Tisch's do a decent job stewarding over my capital. It is a bit frustrating to watch them keep the break-even hotel division as a plaything for Jonathan and to be somewhat complacent overall, but in the end you have a basket of ok businesses trading at a 20-30% discount, where the default is to invest cash at a 20% return...

 

Is Loews a fifty cent dollar? Not exactly. Is Jim as good as his forefathers? No! But I would be very surprised to not beat the market handily over the next ten years.

 

Btw, been lurking here a few weeks...awesome board...

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  • 3 weeks later...
  • 1 month later...

Respectable quarter

 

Book Value + 3.4% QoQ to $48.96

Negligible buybacks again currently 397.44m  shares outstanding

 

CNA - rates increased in the order of 3-5%, purchased Hardy Underwriting for $227m

DO - two of the new drillships already contracted, the other two being marketed but rates are firm

Highmount - impairment charge likely to be in the order of $400m for YE 2012 due to low natural gas price

 

Holding company cash investments increase from $3.3bn to $3.7bn over the quarter

 

http://seekingalpha.com/article/543061-loews-ceo-discusses-q1-2012-results-earnings-call-transcript

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Loews is still like watching paint dry. I would prefer they dont make additional natural gas acquisitions. They are looking at buying something soon, though. They are holding cash, and not buying back cheap stock. Something is in the works.

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Its crazy how much faster one can read a transcript vs. listening to a call. Loews is still an interesting company, I just wish they were hungrier. It will be interesting to see what they do with cash. I would prefer hotels vs. more gas.

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Thanks for posting. Enjoyed reading it.

 

" Jim Tisch dwells on the downside of acquisitions. Last year, he told analyst Sam Yake of BGB Securities that buying a company is like entering a pitch- black room where all kinds of dangers lurk. "

 

“You can’t argue with success, but they move like a turtle with two broken legs,” Yake says.

 

I feel like that turtle somedays. LOL

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Guest rimm_never_sleeps

loews as most conglomerates do, is always going to trade at a discount to it's breakup value. it will trade that way until some corporate action, which is less likely to ever happen with the Tisch controlled Loews. but it is a store of value over the long term.

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I've always had Loews on my radar because of this board, but I've never really liked it, even when it got really low. It probably wouldn't rank in my top 10 or maybe even 15 best ideas. But that's just me...

 

Liberty,

I like your posts and respect your opinion very much. So, I would really appreciate, if you could elaborate a little further on the reasons why you dislike Loews Corp.

I have written about my view on L, and I would also add that I consider an investment in L below book value a good way to have an interest in the Oil&Gas industry, through Diamond, Boardwalk, and HighMount (which are good companies).

But, if you have time and patience, I would love to know the view of someone, who clearly is a very thoughtful and accomplished investor, and who happens to disagree with me.

Thank you very much!

 

giofranchi

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I've always had Loews on my radar because of this board, but I've never really liked it, even when it got really low. It probably wouldn't rank in my top 10 or maybe even 15 best ideas. But that's just me...

 

Liberty,

I like your posts and respect your opinion very much. So, I would really appreciate, if you could elaborate a little further on the reasons why you dislike Loews Corp.

I have written about my view on L, and I would also add that I consider an investment in L below book value a good way to have an interest in the Oil&Gas industry, through Diamond, Boardwalk, and HighMount (which are good companies).

But, if you have time and patience, I would love to know the view of someone, who clearly is a very thoughtful and accomplished investor, and who happens to disagree with me.

Thank you very much!

 

giofranchi

 

Hey, sorry for not replying to this sooner, I don't really follow this thread closely.

 

First, I must say that I think you're confusing me with someone else; I certainly can't claim to be an accomplished investor, though I hope to be someday, and I do try my best to be thoughtful :)

 

Anyway, about Loews:

 

I haven't really thought about it much in at least a year, but it kept popping up on my list because people usually include it when they are talking about 'mini-Berkshires', along with Fairfax, Markel, Leucadia, etc.

 

I don't have big reasons to dislike L, but I also don't have many reasons to like it, which is why I don't care too much about it. I'm not convinced that current management is of the caliber of Larry Tisch, I'm not super excited about their assets, and I'm not sure if their conglomerate discount will go away any time soon, so buying under book might not help that much, at least in the foreseeable future. And that BRK-like model, with lots of assets and lots of capital allocation decisions in various industries, is mostly a bet on management, so I would have to really like them to consider it. Right now, if I had to choose, I would prefer Berkshire, Fairfax, Leucadia, and Markel to them (roughly in that order, but always depending on price)...

 

So in short: I don't see too much that is really wrong with them, but not enough that is right either to want to dig deeper. But as I said, don't take my word for it, I haven't even thought about L much in the past year+.

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First, I must say that I think you're confusing me with someone else; I certainly can't claim to be an accomplished investor, though I hope to be someday, and I do try my best to be thoughtful :)

 

Surely you're joking Mr. Liberty!  ;D ;D ;D

 

Judging by the depth of your posts, you surely must be an accomplished investor!

And thank you for your kind answer!

 

giofranchi

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  • 3 months later...

Since it appears that Loews' mission in life is to trade below NAV, I'm thinking that the best way to play this would be to sell puts on it. The June 13 puts, with a strike of 40 are trading at 3.35. So essentially you're putting $40 at risk while being paid 3.35 = 8.4% return for about half a year if the option is not exercised....and you can keep rolling over...or am I missing something?

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